FCO question

I would build in a day or two in Rome on each end. You don't want to risk missing your flight to Palermo — or, even more importantly, your return transatlantic flight.

When I did the flights from the US to Palermo, I wanted to maximize my time in Palermo before the tour. I traded a bit of risk for more time in Palermo. There are a lot of flights from Rome to Palermo on several airlines, currently charging $90 or less for random dates in April. (You didn't specify so I chose April.) I flew to Palermo three hours after landing in Rome, on a separate ticket and at a time of day that had numerous later flights in case I missed mine. That day I could've made a one-hour connection, but that's no guarantee that other days will be the same.

I flew direct from SFO to Rome and then instead of stressing out around a connection, I stayed at the Rome airport Hilton.
It’s literally a few minutes walk from the terminal.
After customs, etc., got to the hotel late afternoon, took a shower and then just walked back to the airport for some food, went to bed early and then woke up early and took the first flight to Sicily.
Arrived in Sicily totally refreshed!!

FCO is convenient but don't overlook Spain or Portugal as hubs. Iberia and AA are partners so I imagine you would have great codeshare and miles opportunities there.

I'm more in the same boat as @happytotravel in that we are comfortable with a bit of risk. The cost of even a last minute flight is usually cheaper than a night in that Europe gateway city. Plus, you can always upgrade your discount airline ticket to a flexible "Business Class" fare for relatively little money. We often do that anyway if we want access to a different airport lounge to take a shower or chill before our next flight.

Thanks for all the input. What we were able to put together is AA from DFW to FCO; then, after 5 hours layover, ITA to PMO same ticket! (That option only popped up last night after watching for days.)
The return is MLA on KM to LHR and after 3 hours, BA to DFW (which always turns out to actually be AA) all on same ticket. However, that wasn’t available on BA but through another travel service website. BA wants to take me to Gatwick 🙄 and KM Malta will nickel and dime for every service but still not expensive compared to the overall fare.
The airlines run the world, we only live here.
I’ll post on how it all turns out in May but for now I have assigned seats on four legs!!!!!

I, too, have stayed at the hotel at FCO and thought it most convenient.

Thanks. I am aware of all your warnings. However, the trip to Palermo is on the AA website and booked with them. That’s how I knew it was possible. And now you do, too.
The return trip (which I learned could happen through the reputable online travel service I have used for 30+ years) is also booked through the airlines. I didn’t think it ethical to name them on someone else’s’s site.
The layover times are intentional choices having made dozens of international flights and understanding my own anxiety tolerance.

American has an interline agreement with ITA. They have for years. OP has one ticket for both legs.

Thanks, Chris